Sportsgear Rivals

Adidas Sprints Ahead of Puma

ARCHIV - Schuhe der Sportartikelhersteller adidas (l) und Puma stehen am 21.09.2009 in Herzogenaurach (Mittelfranken) für ein Fußball-Freundschaftsspiel zwischen den beiden Sportartikelhersteller auf einem Ball mit der Aufschrift "Peace One Day". Dei der Champions League Begegnung zwischen dem FC Bayern München und Borussia Dortmund in Wembley (England) treten nicht nur zwei deutsche Teams gegeneinander an, sondern auch deren Sponsoren. Foto: Daniel Karmann/dpa (zu dpa-KORR: "Adidas gegen Puma: Kampf der Sport-Konzerne in Wembley" vom 23.05.2013) +++(c) dpa - Bildfunk+++
Adidas vs. Puma. The brand with the three-stripes is thrashing its smaller German rival.
  • Why it matters

    Why it matters

    Puma continues to suffer from catastrophic managerial mistakes over the past decade while customers are snapping up Adidas shoes and sportsgear.

  • Facts

    Facts

    • The two companies were founded by German brothers: Adidas was run by Adolf (“Adi”) Dassler and Puma by Rudolf Dassler.
    • In the first quarter, Adidas reported increased revenues of more than €700 million — almost as much as Puma’s total sales for the period.
    • The German sports-shoe firms compete with U.S.-based Nike and Under Armour.
  • Audio

    Audio

  • Pdf

When the head of Puma sportswear, Bjørn Gulden, looks out of his office window, he sees the sprawling headquarters of rival Adidas. Only a field in Bavaria separates the two largest European makers of sneakers and sportswear.

And even this barrier will soon be gone, because Puma is expanding its headquarters and will edge closer to its main competitor.

But the two companies in the quiet southern town of Herzogenaurach are only close geographically. In terms of their financial success, the sporting goods makers are worlds apart.

Adidas, known by its trademark three-stripe logo, saw its share price hit a record high last week, spurred by superb quarterly figures and an impressive forecast.

But in recent years, Puma, with its pouncing big cat logo, has been relieved if its revenues didn’t shrink.

Adidas has made its way into the Champions League while Puma is struggling against relegation.

The two companies were founded by German brothers who were partners in the family sports-shoe firm in the 1920s. After a bitter feud, they set up separate businesses: Adidas was created by Adolf (“Adi”) Dassler and Puma by Rudolf Dassler. For a long time, Adidas was out in front, but Puma always played more or less in the same league.

But those days are long gone. Now Adidas has made its way into the Champions League while Puma is struggling to remain in contention.

Last week underlined the stark contrast. In the first quarter, Adidas posted revenues of €4.8 billion, or $5.4 billion, a jump of €700 million, almost as much as Puma’s total sales for the period. And the gap is widening: Adidas is a good five times as big as Puma, and its profits are many times greater.

Sports and leisurewear fans are snapping up Adidas’ shirts, shorts and sneakers, while Puma has to fight for every centimeter of shelf space in sporting goods stores.

 

Sportswear Competitors-01 Puma Nike Adidas Under Armour

 

Adidas also faced a crisis two years ago, but things never got as bad as at its neighbor Puma.

With the former professional soccer player Mr. Gulden at its helm, a man who once provided his services to Adidas, Puma has had an experienced and competent chief executive for three years now.

The label, however, continues to suffer from catastrophic managerial mistakes in the past decade. Back then, the company enjoyed phenomenal success due to its sports streetwear niche. At times, Puma was a veritable money machine and the trendy label of choice in Hollywood and beyond.

But the company’s former head, Jochen Zeitz, neglected to prepare for what would happen when all the hype ended. When the trendsetters turned to other brands, Puma had long since lost its traditional place in sporting goods stores.

Today Puma has thoroughly competitive football boots and jogging shoes in its product palette. But in the meantime, not only Puma and Adidas are competing for athletes’ favor. Competition is fierce in the United States, where Nike has a strong market share. In addition, up-and-coming rivals like Under Armour and Lululemon are shaking up the market.

 

142 Adidas - WTB 2015 Neu 2016-03-10-01

 

In contrast, Herbert Hainer, the chief executive of Adidas, has managed to cultivate his company’s roots in sports and simultaneously to achieve unprecedented success as a lifestyle brand.

Upon taking up his position almost three years ago, Mr. Gulden rightly warned that Puma was faced with a marathon. But that was an understatement: It will be a triathlon, at the very least.

 

To contact the author: hofer@handelsblatt.com

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